May 27, 2021

Port of Seattle announces major new building at T-106

Rendering by Nelson [enlarge]

This view look northeast at the proposed building, with the stacked containers closest to the Duwamish; Beacon Hill is in the background.

In a huge deal that few saw coming, the Port of Seattle announced that Trammell Crow will build it a two-story, 695,000-square foot industrial/logistics building at its Terminal 106. The arrangement will be a ground lease at its 31-acre property at 44 S. Nevada St. That's on the east side of the Duwamish Waterway, a little south of the West Seattle Bridge.

The Port said in a statement that, “The new facility will be able to support e-commerce, manufacturers and logistics providers that support maritime industries.”

Terms for the ground lease were not announced, though Port Commission meeting materials indicate a base rent, after building completion, of about $3.1 million. The initial term would be 50 years, with two 10-year options to extend. Rent escalator clauses mean the 50-year value to the Port would be around $265 million.

The Port wants the project completed by 2024. No plans have been filed yet, and the permitting and construction schedule will depend on Trammell Crow. Port Commission meeting materials indicate 2023 as a desired start date. A two-story warehouse would take longer than a traditional one-story, tilt-up project.

Port representatives say that a request for proposals was issued in 2019; there were some 30 respondents, and two finalists (the other not named). The budget and team are up to Trammell Crow, which didn't respond to a DJC query.

Nelson will design the project, which will replace the vacant former Hasbro building, the largest structure at Terminal 106. Three separate smaller buildings will remain. The Hasbro building is on the north edge of the site, south of the cement plant.

In a statement, Port of Seattle Commissioner Peter Steinbrueck said, “Industrial lands are the backbone of our region's economic resilience and full of untapped potential. Putting a strategic property back into productive use creates immediate construction jobs and lasting economic development opportunities for nearby underrepresented communities.

“Trammell Crow Company developed our Des Moines Creek North property in the City of SeaTac, and we look forward to work with them on this project.”

Trammell Crow's Mark Netherland said, “We are pleased to be working alongside the Port of Seattle on this important project, which will create a significant advantage for the Port, as it advances its logistics capabilities and ability to attract world-class industrial tenants to this market.”

To date, the only other multilevel industrial/logistics building in our market is Georgetown Crossroads, by Prologis and Nelson, which is leased to Amazon. (That actually has three levels.) Such buildings indicate the premium value of close-in industrial land that's near consumers.

The Port estimates that the new facility will create up to 140 construction jobs, and that future operations will create approximately 650 to 1,200 full-time employees, with an estimated payroll of more than $28 million annually.

The port has owned the property since 1970; since then, it also encompassed a separate property, north of the cement plant. That was later spun off and renamed as Terminal 104.

Terminal 106 is today a complex of four buildings developed from roughly 1947 – 1968. Plans for removing the 534,000-square-foot Hasbro Distribution Center date back at least to 2005. Hasbro had left in 2002. Recent tenants have included Fisk Electric and Tutor Perini.

The other three buildings to remain have about 75,800 square feet. Those are mostly leased to ConGlobal, along with a container yard on the shore.

Unsurprisingly, Terminal 106 is on the state Department of Ecology list of polluted sites. Ecology says that cleanup is underway, but a determination of no further action (NFA) has not been issued. Tanks and contaminated soils were removed in the early 1990s. Monitoring wells have been ongoing since circa 2012.

Ecology says that arsenic, cadmium, copper, lead, nickel, selenium, zinc, PAHs, PCBs, gasoline and diesel have been detected in the soil and groundwater. Aecom has previously advised the Port on such issues. Trammell will be responsible for the cleanup, once it signs the ground-lease agreement.

Meanwhile, down at the Port's Des Moines Creek North, Trammell Crow partnered with IAC Properties (previously International Airport Centers) to develop a 457,000-square-foot logistics building at 20529 24th Ave. S. That's leased to Amazon. That team also included Craft Architects, Pennon Construction, Barghausen Consulting Engineers (civil) and Shutler Consulting Engineers (structural). Work began on that tilt-up job in 2018, and lasted about a year.